Press Release

New Resource Bancorp Operating Income Grew 89% in Q1 2018 in Advance of Amalgamated Bank Merger

Company Release - 4/27/2018 8:00 AM ET

SAN FRANCISCO, April 27, 2018 (GLOBE NEWSWIRE) -- New Resource Bancorp (OTC Link LLC:NRBC) today reported operating income (pre-tax pre-provision) of $923,000 in Q1 2018, growing 88.8% from the same period last year and 21.4% over the previous quarter, fueled by strong growth in loans. Net income for the first quarter was relatively unchanged from the first quarter of 2017 at $306,000, or $0.05 per share. All financial results are unaudited.

The bank has started the year with strong momentum. The loan portfolio grew $41.5 million, or 15.8%, to $304.3 million at March 31, 2018, compared to $262.8 million at December 31, 2017. The solid growth in loans reflects the improving economy and appeal of the bank’s values-based banking model. Ninety-three percent of New Resource Bank’s gross loans are made to socially and environmentally responsible organizations, which take an impact assessment to determine their level of sustainability as part of the loan qualification process. Total deposits grew $15.6 million, or 5.1%, to $320.4 million at quarter end, compared to $304.8 million at December 31, 2017. Asset quality remained impressive, with nonperforming assets to total assets resting at 0.01%.

Operating income totaled $923,000 for the first quarter of 2018, a gain of 21.4% from the last quarter of 2017, and 88.8% over the $489,000 posted in the first quarter of 2017. Operating income was favorably impacted by $49 million or 19% growth in loans year over year. Pre-tax net income increased modestly to $423,000, or 1.9% over the previous quarter, and declined 13.5% from the first quarter of the previous year. The first quarter of 2018 was impacted by an increase to the loan loss provision of $500,000 as a result of the 15.8% loan growth. Net income improved to $306,000 for the first quarter of 2018 over the previous quarter. In the fourth quarter of 2017, the net loss totaled $1.4 million, or $0.24 per share, which was impacted by the $1.8 million in tax expense driven by the revaluation of its deferred tax asset.

New Resource is expected to complete its merger with Amalgamated Bank of New York in May. The New Resource Bank shareholders have formally approved the transaction and the banks are awaiting final regulatory approvals. “The strong results of the quarter will lead New Resource into a successful beginning with Amalgamated Bank,” said Vincent Siciliano, president and CEO of New Resource Bank. “Amalgamated is acquiring a strong balance sheet and impressive momentum. The combination of our two banks creates a robust catalyst for change in the banking world.”

Key financial results from first quarter 2018 compared with the first quarter of 2017 include:

Loan growth: Loans outstanding grew 19.3% to $304.3 million in the first quarter, from $255.1 million in Q1 2017.

Asset quality: Non-performing assets to total assets remained at 0.01% as of March 31, 2018, unchanged from the first quarter of 2017.

Deposit growth: Deposits rose 3.6% over the past year, reaching $320.4 million, from $309.4 million in the first quarter of 2017.

Total assets: Total assets increased 17.8%, to $364.4 million from $352.5 million a year ago.

Net interest income: Net interest income was $3.75 million for the first quarter, an increase of 5.7% and 13.0% from December 2017 and March 2017 respectively.

Non-interest income: Non-interest income was $469,000 for the first quarter, an increase of 54.3% from March 2017. Treasury fees contributed to this growth.

Net interest margin: Net interest margin for the quarter amounted to 4.5%, an increase of 5.4% from the previous year.

Non-interest expense: Non-interest expense was $3.3 million for the quarter, an increase of 5.2% from the previous year. Expenses grew as a result of consulting costs associated with the merger with Amalgamated Bank.

Provision expense: A provision for loan losses of $500,000 was booked in the first quarter of 2018 compared to $345,000 in Q4 2017 and no provision expense the previous year. The increased provision expense was due to the significant growth in loans.

Efficiency ratio: The bank achieved an efficiency ratio of 78.1% for the first quarter – an improvement from 86.5% the previous year. The growth in revenue exceeded the growth in expenses, helping to lower the bank’s ratio.

Risk-based capital: The common equity tier 1 capital ratio amounted to 11.01% and the total risk-based capital ratio was 12.26% in the first quarter of 2018, significantly above the standard for a well-capitalized bank.

“New Resource Bank has enjoyed great success over the past 12 years in providing values-based financing to socially and environmentally responsible businesses and giving individuals and organizations alike the ability to use their deposits to make change. We look forward to continuing our innovative mission as part of a larger brand in our quest to bring values-based banking to the mainstream,” said Mark A. Finser, chairman of the New Resource Bank board. Mark Finser is expected to join the Amalgamated Bank Board once the merger between the two banks has closed. Following the close of the merger, New Resource Bank shareholders will be given detailed instruction on exchanging their shares of New Resource Bancorp stock for Amalgamated shares.

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